A college-age friend of mine keeps a large stuffed elephant in his dorm room. When people ask him why he has it there, he replies "Ssssshhhhhh . . . we're not supposed to talk about that!" I was reminded of this friend when I listened to Usana Health Science's (NASDAQ: USNA) 1st quarter conference call. Here's some of what's happened with Usana in the past month:

• Ex-con turned private investigator Barry Minkow released a report suggesting that the company's business model was an unsustainable pyramid scheme.
• Minkow accused a prominent director and spokesman for the company of inflating his academic credentials. The company admitted the "errors" and the director decided not to stand for re-election. Minkow also suggested another senior executive at the company had inflated his resume.
• A slew of shareholder class-action lawsuits have been filed against the company.
• The company announced that the SEC had begun an informal investigation of the company.

Fast-forward to Wednesday's conference call. Every question asked seemed to have a bullish slant, and assumed that the company was innocent. Questions centered around whether the company has seen an impact on sales from Minkow's report, and whether the company saw this as an opportunity to buy back more shares. I spoke with Barry Minkow about the conference call and he said, "I don't believe one thing they say" and also pointed out that "There was not one tough question allowed to be asked during the conference call."

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Usana's conference call: Analyst incompetence on display originally appeared on BloggingStocks on Thu, 05 Apr 2007 11:07:00 EST. Please see our terms for use of feeds.